Palestinians Retaliate in Trade War with Israel, Ban Goods from Five Firms

Ramallah, Palestine (Sputnik) – On Tuesday, the Palestinian government announced a West Bank blockade of products from five Israeli companies, citing a similar decision by the Jewish state.

Palestinian officials released a statement saying, “In response to the Israeli decision to ban the entry to Jerusalem of products from five Palestinian companies, the government decided to ban the entry of products from five Israeli companies to the West Bank. This decision takes effect immediately.”

In previous years, Palestinians threatened to stop purchasing Israeli products, which constitute in excess of two-thirds of Palestinian imports, or nearly $6.5 billion per year. The decision, however, represents the first time an elected government of the Palestinian people has taken official action to sanction Israeli imports.

The five firms targeted are dairy companies Tnuva, Strauss and Tara, meat firm Zoglobeck and drink company Tapuzina. The action comes after Tel Aviv announced last month a ban on all products made by five Palestinian businesses.

Image Source: Adolfo Lujan, Flickr, Creative Commons

A trade war with the Israeli government carries with it substantial economic risks for the Palestinian people. Presently, over 90% of Palestinian exports go to Israel because high transportation costs prohibit selling goods internationally. Further, Israel controls all borders to the West Bank, so any exports to the rest of the world must pass through Israel. If Tel Aviv institutes tariffs or additional restrictions on Palestinian goods the consequences could be catastrophic.

In 2015, an unofficial International Boycott, Divestment, and Sanctions (BDS) campaign was initiated in Palestine, calling for an economic boycott of Israel to force the country to end its occupation of the West Bank, which it occupied during the Six-Day War of 1967.

The Palestinian economy is much more reliant on Israel than vice versa, given Israel’s high degree of foreign imports and exports as well as its coastal access for shipping. Thus, BDS has so far created a primarily negative impact on the Palestinian population, but has had no discernible impact on Israel.